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Interest rates on Stafford Loans could double from 3.4% to a usurious 6.8% if Congress fails to act by July 1. Many Senate Democrats want another extension of the current rate; Republicans want a variable rate pegged to the market at a higher figure. As Elizabeth Warren put it as she argued for giving students the same rate as banks:

“Right now, the US government is out there investing in large financial institutions, offering them money every single night [for] three quarters of 1 percent, and yet our students, if the government doesn’t do something, will be paying nine times that much,” Warren said to an audience of about 70 students and staff at the Northeastern Visitor Center.
Adding to the debt of poor college students at a time of ever-increasing economic inequality (and record low interest rates) while companies like Apple practice massive tax avoidance is simply ridiculous.

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Originally posted to Comics on Wed Jun 12, 2013 at 06:50 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  That's a great suggestion by Elizabeth Warren. (15+ / 0-)

    And it should be made retroactive, so that underwater former students could have a chance at repaying their loans and becoming productive members of society again.

    I'd go even further and make student loans zero interest loans, like Germany does.  But that should only be for public institutions, imo.

    "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

    by Lawrence on Wed Jun 12, 2013 at 07:05:35 AM PDT

    •  The housemate has been paying on her (10+ / 0-)

      student loans for 15 years, and still owes just barely less than what I owe on a two story house after 14 years.

      And she didn't even go to a particularly expensive college.

    •  Republicans (4+ / 0-)

      Don't want the economy to improve. If the economy stays stagnant 1. They can pin it on Obama 2. They can say, welp I guess we need more de-regulation and lower taxes.  

      The government could charge 1% interest and still make a hefty profit on these loans.  Doing so would, however, mean young people would have more disposable income, which would flush more cash into things like the housing market.  Thus encroaching on the hoarding of goods that the 1% is taking part in.  

      i just look around my neighborhood in Milwaukee.  Houses are selling like hot cakes.  Not to young couples, mind you, but to 55-80 year old white suburbanites, who then rent them to generate even more disposable income for themselves.  I don't begrudge them as they are simply taking advantage of the market, but to act like there is some greater benevolent purpose to their actions is laughable.  

      •  THIS (0+ / 0-)

        demand creates jobs.

        more money in people's hands allows them to spend it on goods and services, creating demand.

        the staggering boost to the economy if student loan interest rates were cut is something Republicons are trying to avoidl  they do not want any positive legacy from the Obama administration.

        Politics is like driving. To go backward put it in R. To go forward put it in D.
        Drop by The Grieving Room on Monday nights for support in dealing with grief.

        by TrueBlueMajority on Wed Jun 12, 2013 at 08:55:54 AM PDT

        [ Parent ]

    •  Yes, but we all know (0+ / 0-)

      that in Republicanland, corporations are people (too, my friend) and that human beings are property.

      On a more serious level, I can see one possible way to get this past at least the Senate: look at the blue-State Republicans who were elected in 2010 (Kirk in particular) and try to push them into it.

      Point out that they're going to need a track record of opposing conservative orthodoxy if they want to win in a Presidential year, especially since turnout's going to be higher among angry young people than happy, complacent young people. In short, appeal to their self-interest - it's the language they speak.

      Here's a set of Republicans who may be swayed by an argument to their self-interest re: 2016:

      Ayotte (R-NH)
      Johnson (R-WI)
      Kirk (R-IL)
      Toomey (R-PA)

      And possibly Rubio (R-FL) and Portman (R-OH), and Heller (R-NV) for 2018 - they're sitting in swing states rather than blue states, but they're keenly sensitive to their self-interests.

      If the Senate can pass a bill with even half a dozen Republicans signing on, the pressure on the House starts to ratchet up. It may not take effect before the 1st of July, but it will take effect.

      "Violence never requires translation, but it often causes deafness." - Bareesh the Hutt.

      by Australian2 on Wed Jun 12, 2013 at 07:39:28 AM PDT

      [ Parent ]

    •  When I was a fresh graduate (0+ / 0-)

      we had discussions about whether it was ethical to put money into savings rather than pay down your student loans faster, because an ordinary savings account paid more than the interest on our student loans.

      True fact.

      Fry, don't be a hero! It's not covered by our health plan!

      by elfling on Wed Jun 12, 2013 at 08:47:28 AM PDT

      [ Parent ]

  •  Ok, I gotta say, (6+ / 0-)

    'Udder Queen' sounds like the Hooters of Soft Serve Ice cream shacks...

  •  The only way the 1% can keep their caste (4+ / 0-)

    exclusive is to keep stepping down on and grinding the fingers of those on the rungs beneath them.  That's what it's about: gauranteed income for the 1% via deprivation of the 99%.

    Building a better America with activism, cooperation, ingenuity and snacks.

    by judyms9 on Wed Jun 12, 2013 at 07:09:44 AM PDT

  •  Does anyone think that Republicans give a damn? (2+ / 0-)
    Recommended by:
    belinda ridgewood, wader

    Anyone? The only people they care about can afford the tuition rate increases - they own shares in the banks themselves, or at least have parents who do.

    "Violence never requires translation, but it often causes deafness." - Bareesh the Hutt.

    by Australian2 on Wed Jun 12, 2013 at 07:12:51 AM PDT

  •  Warren's proposal makes a lot of sense. (9+ / 0-)

    Actually, it makes much more sense then offering it to the Banks.  The argument for doing it has been that freeing up capital will mobilize the economy.

    The reality is that our economy is frozen not because the banks lack capital, but because the middle and lower class is so squeezed they are unable to spend money.  We've worshipped rich people in this country for so long, people seem to think that the economy is based entirely on them, and it really isn't.

    When the middle class can barely afford their rent, they can't go out and spend, and that's why the economy isn't recovering quickly.

    Ignorance more frequently begets confidence then knowledge. Charles Darwin

    by martianexpatriate on Wed Jun 12, 2013 at 07:15:33 AM PDT

    •  We are facing (4+ / 0-)

      the Walmartization of America.  It doesn't matter what the middle class and others can afford - we are trying to get them to do more for less.  Anything that can be farmed out to slave labor nations will be.  Anything that does not lead to profit will be attacked or forced into a for profit model.  This isn't about a country of people it is about a collections of corporations with needs for more profit.

      "You have attributed conditions to villainy that simply result from stupidity"

      by newfie on Wed Jun 12, 2013 at 07:19:46 AM PDT

      [ Parent ]

  •  Fixing interest for student loans is a bandaid. (3+ / 0-)

    We're ripping off our own children.  Remember when the public university system was PUBLIC?

  •  I have no position on the loan rate (2+ / 0-)
    Recommended by:
    Wisper, Caj

    increase but a "usurious 6.8%?"  Really?

    I paid 8% back in the eighties and I don't think that was a high rate at the time.

  •  Reminder for the republican God botherers (4+ / 0-)

    Exodus 22:25

    If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him.

    Help me to be the best Wavy Gravy I can muster

    by BOHICA on Wed Jun 12, 2013 at 07:22:49 AM PDT

  •  Tax on students (2+ / 0-)
    Recommended by:
    belinda ridgewood, wader

    students tax

    education tax

    if the government earns revenue from it a tax & see if wingnut brains explode

    PLEASE donate to a global children's PEACE project: Chalk 4 Peace

    by RumsfeldResign on Wed Jun 12, 2013 at 07:32:00 AM PDT

  •  I need to toot my own here! (2+ / 0-)
    Recommended by:
    koosah, smokey545

    Community Colleges. I'm an English Professor (adjunct) at several community colleges and I must say they're very good. Close to home, accredited, good programs taught by qualified staff, and MUCH more affordable.

    Just sayin'.

    But back to the original post, I do agree the rates are way too high. I've been paying mine off since 2001 & I still have about 3 years to go (for my Masters Degree; was lucky enough to get grants & help from Mom for Bachelor's).

    A village can not reorganize village life to suit the village idiot.

    by METAL TREK on Wed Jun 12, 2013 at 07:49:20 AM PDT

    •  Plus, you can transfer to a 4-year college (2+ / 0-)
      Recommended by:
      KingBolete, METAL TREK

      The state of NY is putting in standards for seamless transfer of credit, making it easier than ever to do your first 2 years at a CC and satisfy your gen-ed and core requirements.

      Given the relative cost of tuition, this essentially saves a year of college tuition---and, if the CC is close to home for a traditional student, 2 years of room and board.  

      Taking jokes seriously is the exact mirror activity of laughing if someone says they have cancer. --jbou

      by Caj on Wed Jun 12, 2013 at 09:36:56 AM PDT

      [ Parent ]

    •  Agreed. Communities colleges are a bargain (1+ / 0-)
      Recommended by:

      and booming in our community. Ours has over 50,000 enrolled students part-time and full-time with double-digit growth.

      But of course the Tea Party hates education so they voted to cut the funding. Seriously. They organized a successful campaign to defeat the last bond election and won. Plus captured most of the board member slots so they can cut funding further.

      Fighting Liberal at
      “You must be the change you wish to see in the world.” --Gandhi:

      by smokey545 on Wed Jun 12, 2013 at 09:38:27 AM PDT

      [ Parent ]

  •  I remember when my student loan payment (0+ / 0-)

    was $76 a month and I thought that was a lot of money.

    I really follow sorry for the students and their parents nowadays:

    Let's see, I can buy a house, a car OR a college education but only ONE of above.

    Fighting Liberal at
    “You must be the change you wish to see in the world.” --Gandhi:

    by smokey545 on Wed Jun 12, 2013 at 09:08:19 AM PDT

  •  Rates are a small part of the problem (1+ / 0-)
    Recommended by:
    Jen Sorensen

    Reducing the rates is a good idea, but not the best solution.  People shouldn't leave the university (with or without a degree) with a debt comparable to a luxury car or even a house (in some areas of the country).  Worse, the risks associated with investing in human capital are rising.  As a nation we need to share the risk—maybe invest in all of our futures?

    Over time we've seen the devaluation of whole fields of human capital.  The gasbag's solution to this is always to say "retrain"—about as useful as their solution to unemployment: "Get a job!"—however, retraining is an expensive proposition, in time and money, and practically infeasible when someone already has a boatload of student debt.  In addition to making it not financially ruinous to get a first degree, we need to make it feasible to retrain.  This means financing help but also reworking the education system so that it supports changing fields.  This is worst in higher education since the programs are mostly built around a comprehensive 4-year program and often full-time study; the Federal govenrment ought to provide assistance and incentive to public institutions to create programs of study appropriate for those changing fields.

    My country, right or wrong; if right, to be kept right; and if wrong, to be set right.—Carl Schurz
    "Shared sacrifice!" said the spider to the fly.—Me

    by KingBolete on Wed Jun 12, 2013 at 09:57:51 AM PDT

  •  hey man... (0+ / 0-)

    that kid could kill it in mongolia with that yak studies degree and the low cost of living. don't hate.

  •  Just a question (0+ / 0-)

    If the potential 6.8% rate is usurious, then what is the 7.9% rate parents are charged for the Plus loans?

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